As I have stated many times before, I have been a chart analyst of the stock market for over 50 years. I have recently put information on the stock indexes here to show you what I do and how I do it. Detractors have been many.
As such, I have decided to put up a chart analysis on a specific stock (free of charge) so that you can see with your eyes how I do things and the extent of my knowledge. I have placed a high degree of probability on this trade, and it does offer a very attractive risk/reward ratio, meaning you might want to consider doing the trade, especially because it is a short position in a Chinese stock that is traded in the U.S. and is a relatively large company, meaning the charts and computers trade it.
The fundament picture suggests that the 18-month recovery rally in the Chinese market has ended and that a correction downward is to begin.
YUMC Friday Closing Price – 43.57
YUMC is a fast-food chain in China that handles KFC and Pizza Hut. The stock made a new 29-week low 7 weeks ago and since then has been moving sideways while the Chinese stock market rallied. 20 days ago, the stock broke the 200-day MA (currently at 45.55) and has proceeded to test the line 3 times successfully. The stock closed on the low of the week on Friday and further downside below last week’s low at 43.42 is expected to be seen this week. With the Chinese index due to head lower now, this stock could be one of the leaders to the downside.
In looking at the intraweek chart, YUMC has a clear downside objective of 33.55, which is where the next established intraweek support is found. With the stock having gotten up to 45.59 this past week and that being also where the 200-day MA is currently at, it does suggest that breaking of that level would negate the negative outlook, meaning it is a perfect place to put a dependable stop loss at.
Sales of YUMC between 43.55 and 43.71, having an objective of 33.55 and a stop loss at 45.75, offers a 5-1 risk/reward ratio. My rating on the trade is a 3.75 (on a scale of 1-5 with 5 being the highest).
As such, I have decided to put up a chart analysis on a specific stock (free of charge) so that you can see with your eyes how I do things and the extent of my knowledge. I have placed a high degree of probability on this trade, and it does offer a very attractive risk/reward ratio, meaning you might want to consider doing the trade, especially because it is a short position in a Chinese stock that is traded in the U.S. and is a relatively large company, meaning the charts and computers trade it.
The fundament picture suggests that the 18-month recovery rally in the Chinese market has ended and that a correction downward is to begin.
YUMC Friday Closing Price – 43.57
YUMC is a fast-food chain in China that handles KFC and Pizza Hut. The stock made a new 29-week low 7 weeks ago and since then has been moving sideways while the Chinese stock market rallied. 20 days ago, the stock broke the 200-day MA (currently at 45.55) and has proceeded to test the line 3 times successfully. The stock closed on the low of the week on Friday and further downside below last week’s low at 43.42 is expected to be seen this week. With the Chinese index due to head lower now, this stock could be one of the leaders to the downside.
In looking at the intraweek chart, YUMC has a clear downside objective of 33.55, which is where the next established intraweek support is found. With the stock having gotten up to 45.59 this past week and that being also where the 200-day MA is currently at, it does suggest that breaking of that level would negate the negative outlook, meaning it is a perfect place to put a dependable stop loss at.
Sales of YUMC between 43.55 and 43.71, having an objective of 33.55 and a stop loss at 45.75, offers a 5-1 risk/reward ratio. My rating on the trade is a 3.75 (on a scale of 1-5 with 5 being the highest).
